Correlation Between Tsang Yow and Global PMX
Can any of the company-specific risk be diversified away by investing in both Tsang Yow and Global PMX at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Tsang Yow and Global PMX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tsang Yow Industrial and Global PMX Co, you can compare the effects of market volatilities on Tsang Yow and Global PMX and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Tsang Yow with a short position of Global PMX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsang Yow and Global PMX.
Diversification Opportunities for Tsang Yow and Global PMX
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Tsang and Global is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Tsang Yow Industrial and Global PMX Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global PMX and Tsang Yow is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Tsang Yow Industrial are associated (or correlated) with Global PMX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global PMX has no effect on the direction of Tsang Yow i.e., Tsang Yow and Global PMX go up and down completely randomly.
Pair Corralation between Tsang Yow and Global PMX
Assuming the 90 days trading horizon Tsang Yow Industrial is expected to generate 0.42 times more return on investment than Global PMX. However, Tsang Yow Industrial is 2.36 times less risky than Global PMX. It trades about -0.15 of its potential returns per unit of risk. Global PMX Co is currently generating about -0.15 per unit of risk. If you would invest 2,950 in Tsang Yow Industrial on September 2, 2024 and sell it today you would lose (160.00) from holding Tsang Yow Industrial or give up 5.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tsang Yow Industrial vs. Global PMX Co
Performance |
| Timeline |
| Tsang Yow Industrial |
| Global PMX |
Tsang Yow and Global PMX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsang Yow and Global PMX
The main advantage of trading using opposite Tsang Yow and Global PMX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsang Yow position performs unexpectedly, Global PMX can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Global PMX will offset losses from the drop in Global PMX's long position.| Tsang Yow vs. Hota Industrial Mfg | Tsang Yow vs. BizLink Holding | Tsang Yow vs. Cub Elecparts | Tsang Yow vs. Hu Lane Associate |
| Global PMX vs. Hota Industrial Mfg | Global PMX vs. BizLink Holding | Global PMX vs. Cub Elecparts | Global PMX vs. Hu Lane Associate |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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